Prior to filing a lawsuit against the business in June, the Securities and Exchange Commission asked that Coinbase suspend trading on all cryptocurrencies other than bitcoin.
According to Brian Armstrong, CEO of Coinbase, halting such trades would have effectively meant the end of the cryptocurrency business in the US. As a result of the SEC’s request, Coinbase was left with no choice but to file a lawsuit.
At that point, they really didn’t have a choice, Armstrong said in an interview that was released on Monday.
On Monday, an SEC representative indicated that its staff did not request that businesses delist crypto assets.
According to the spokesman, the staff may present its own opinion regarding conduct that could give rise to concerns for the Commission with regard to securities laws during an investigation.
The truth of Armstrong’s claims was not contested by Coinbase, but a representative said that the FT piece left out crucial details about our discussions with the SEC.
Although the opinions expressed in the FT piece could have been those of some staff members at the time, they did not reflect the Commission’s position as a whole, the spokesperson insisted.
They went on, saying that they continue to discuss with the Commission, but they contend that open and equitable rulemaking and Congressional action…represent the best path forward for US crypto users and the businesses establishing the crypto economy in the US.
Early in June, the SEC filed a lawsuit against Coinbase and Binance, a more powerful rival on the global stage, alleging that both businesses operated unauthorized exchanges. After years of permitting the cryptocurrency business to exist in a regulatory gray area, the suits signaled a significant uptick in the SEC’s campaign to control it.
When recalling conversations with the regulator prior to the lawsuit, Armstrong told that Coinbase had asked for clarification on the SEC’s approach for determining that any digital asset besides bitcoin is a security.
Armstrong told that they directed him to delist all assets other from bitcoin and that they would not be explaining it to him.
Companies that deal in cryptocurrencies have fought against having their goods classed as traditional securities or commodities for a long time, claiming that they represent a new class of digital asset that call for unique rules and regulations. The SEC is of the opinion that most crypto offers are securities and as such should be subject to the same laws on Wall Street as stocks and bonds.
By igniting litigation and, ultimately, judicial reviews that spur Congress to act, the actions against Coinbase and Binance may help drive the regulation issue.
The early hours of Monday saw a 4% increase in shares of Coinbase, which went public in 2021. This year, the stock has roughly doubled in value.
